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I found it informative to research the author and his background: https://en.m.wikipedia.org/wiki/Julius_Krein https://en.m.wikipedia.org/wiki/Julius_Krein For

I found it informative to research the author and his background: https://en.m.wikipedia.org/wiki/Julius_Krein https://en.m.wikipedia.org/wiki/Julius_Krein For some reason my mental image of the messenger behind the article was that of a well studied and neutral academic throwing out firehouse citations. his points are thought provoking, but it reduces everything to purely economic competition by a delusional population with only the author to cut through the illusions.

silexia 7y ago
His article shows why we need a wealth tax instead of an income tax... There is a huge difference between a hard working manager making $100k and an equally hard working owner with $10m in assets. I suggest dropping the income tax entirely, and tax wealth under $50k at 0%, $50k - $1m at 1%, $1m - 10m at 2%, $10m - $100m at 3%, $100m - $1b at 4%, and everything higher at 5%. This keeps even billionaires motivated to work hard to earn returns on their assets, without taking from the little guy who can't afford it.
- friendelschudel 7y ago
  I keep hearing this idea from a variety of sources recently, and the idea is so absurd I don't even understand how it came to be. How, exactly, do you expect the government to tally the amount of wealth to be taxed for each person in the country? The amount of bureaucracy and auditing and enforcement it would require would dwarf the insurance industry, and waste taxpayer dollars to the extent that it couldn't actually be profitable for the government.
  - sobani 7y ago
    The (US) government today has a tax on investment returns. Tallying up the buys and sells seems like to be a much more complicated than keeping track of the total wealth. The way you accomplish this is by asking everyone: "What's your total wealth?" and then doing random audits.
    - friendelschudel 7y ago
      The very wealthy don't have liquid and easily-appraised assets. Calculating the total wealth of someone who owns art, jewelry, real-estate, historical artifacts, animals, and fractions of many international businesses is impossible. The idea that the wealthy can just print off a report from their TDAmeritrade account and turn it into the government is laughable. Even they don't have any real idea how much wealth they have.
  - dragonwriter 7y ago
    > How, exactly, do you expect the government to tally the amount of wealth to be taxed for each person in the country? Ask and audit, the same way it does income. Of course, it's harder to get filed confirmation data for wealth and even easier to have an alternative valuation for wealth held in non-cash assets than for realized income, so it will be much easier to evade, but that's probably part of why it (which complicates our overall system of taxation) rather than taxing the currently tax-favored income of the rich, primarily capital gains, at the same rate as other income (which would simplify the tax system) is favored by people whose concern is to be seen as doing something about tax fairness.
    - friendelschudel 7y ago
      I think by "easier to evade" you actually mean "impossible to enforce". The sorts of things the wealthy store their money in aren't easy or even possible to value, especially on some yearly basis.
- marcusverus 7y ago
  This would be problematic for people who've paid income taxes for their whole lives and have planned retirement based on the current system. Assume a $1.5M nest-egg and a safe-withdrawal rate of 4% per year. Ignoring capital gains taxes, property taxes, etc, this leaves you with a modest $60,000 retirement income. Based off your proposed figures, that wealth would have a $20,000 annual tax bill, which is 1.3% of the total. Now, since the safe withdrawal rate is 4%, you can only withdraw 2.7% for your retirement income, which leave you with $40,500. In other words, your 1-2% tax has reduced the passive income by 33%. Of course, it would be much easier to grow the retirement account without income taxes, which would likely more than offset offset this reduction. For people who have paid income tax and planned their retirements based on the current system, this change would be devistating.

silexia 7y ago

His article shows why we need a wealth tax instead of an income tax... There is a huge difference between a hard working manager making $100k and an equally hard working owner with $10m in assets. I suggest dropping the income tax entirely, and tax wealth under $50k at 0%, $50k - $1m at 1%, $1m - 10m at 2%, $10m - $100m at 3%, $100m - $1b at 4%, and everything higher at 5%. This keeps even billionaires motivated to work hard to earn returns on their assets, without taking from the little guy who can't afford it.

friendelschudel 7y ago
I keep hearing this idea from a variety of sources recently, and the idea is so absurd I don't even understand how it came to be. How, exactly, do you expect the government to tally the amount of wealth to be taxed for each person in the country? The amount of bureaucracy and auditing and enforcement it would require would dwarf the insurance industry, and waste taxpayer dollars to the extent that it couldn't actually be profitable for the government.
- sobani 7y ago
  The (US) government today has a tax on investment returns. Tallying up the buys and sells seems like to be a much more complicated than keeping track of the total wealth. The way you accomplish this is by asking everyone: "What's your total wealth?" and then doing random audits.
  - friendelschudel 7y ago
    The very wealthy don't have liquid and easily-appraised assets. Calculating the total wealth of someone who owns art, jewelry, real-estate, historical artifacts, animals, and fractions of many international businesses is impossible. The idea that the wealthy can just print off a report from their TDAmeritrade account and turn it into the government is laughable. Even they don't have any real idea how much wealth they have.
- dragonwriter 7y ago
  > How, exactly, do you expect the government to tally the amount of wealth to be taxed for each person in the country? Ask and audit, the same way it does income. Of course, it's harder to get filed confirmation data for wealth and even easier to have an alternative valuation for wealth held in non-cash assets than for realized income, so it will be much easier to evade, but that's probably part of why it (which complicates our overall system of taxation) rather than taxing the currently tax-favored income of the rich, primarily capital gains, at the same rate as other income (which would simplify the tax system) is favored by people whose concern is to be seen as doing something about tax fairness.
  - friendelschudel 7y ago
    I think by "easier to evade" you actually mean "impossible to enforce". The sorts of things the wealthy store their money in aren't easy or even possible to value, especially on some yearly basis.
marcusverus 7y ago
This would be problematic for people who've paid income taxes for their whole lives and have planned retirement based on the current system. Assume a $1.5M nest-egg and a safe-withdrawal rate of 4% per year. Ignoring capital gains taxes, property taxes, etc, this leaves you with a modest $60,000 retirement income. Based off your proposed figures, that wealth would have a $20,000 annual tax bill, which is 1.3% of the total. Now, since the safe withdrawal rate is 4%, you can only withdraw 2.7% for your retirement income, which leave you with $40,500. In other words, your 1-2% tax has reduced the passive income by 33%. Of course, it would be much easier to grow the retirement account without income taxes, which would likely more than offset offset this reduction. For people who have paid income tax and planned their retirements based on the current system, this change would be devistating.